The Future of Children, Princeton - Brookings: Providing research and analysis to promote effective policies and programs for children.

During the same decade in which the system-of-care philosophy was embraced, managed health care arrangements were widely adopted. Initially, the use of managed care to finance and deliver mental health and substance-abuse servicesalso referred to as behavioral health services- occurred primarily within private, employer-sponsored health plans. In recent years, however, managed care arrangements for behavioral health services have been implemented more widely in the public sector, particularly in state Medicaid programs.

With the advent of managed care, many questions have been raised about the implications for delivering mental health services to children and adolescents. Of particular concern is whether progress in building systems of care is in jeopardy, whether the system-of-care philosophy will be abandoned, whether the use of Medicaid to support system-of-care compo-nents will be curtailed, and whether access to appropriate, comprehensive, high-quality behavioral health services for children and adolescents and their families will be compromised.

Although these questions focus mostly on apprehensions about managed care, both opportunities and risks related to the application of managed care approaches have been identified.¹⁹ In terms of potential positive effects, managed care is clearly intended to result in improvements in the efficiency and cost-effectiveness of services, in part by reducing the use of high-cost services, such as hospital care, when other service options might be equally effective. The shift to managed care also provides an opportunity to redesign the service system and expand the array of services covered by Medicaid, adding a range of intermediate services and supports such as home-based services, day treatment, respite care, behavioral aides, and crisis services. Increased accountability and a greater focus on outcome and quality measurement are seen as opportunities related to managed care.

Although there may be clear benefits associated with managed behavioral health care, potential risks are of concern to policymakers, mental health providers, and children's advocates.¹⁹ Rather than expanding the array of covered services, the advent of managed care could result in a regression to the traditional insurance model of covering a limited number of services for a limited amount of time (typically 30 psychiatric inpatient hospital days and 20 outpatient mental health visits). Some variation of this approach has usually been offered as part of basic managed care plans through health maintenance organizations (HMOs). If adopted as part of managed care reforms, both the range and level of services covered by Medicaid would be restricted.

Another hazard is that children with serious disorders may be underserved. Without effective risk-adjustment strategies to protect the financial interests of managed care orga nizations (MCOs) and providers, there is little incentive in a managed care system to serve the "high utilizers" of services-those who are the most expensive to serve. For children and adolescents with serious and complex problems, underservice within the behavioral health care system would likely result in shifting the responsibility for providing and funding their care to other systems such as special education, child welfare, or juvenile justice.

The loss of an interagency focus is another concern. Interagency planning at the system level and interagency service planning for children are both integral aspects of systems of care. Both of these elements could be lost if they are not directly incorporated into managed care plans, requests for proposals, and contract requirements for MCOs. Many of the private, for-profit MCOs that are increasingly managing Medicaid behavioral health services have limited experience with interagency systems of care.

Concerns about providers have been raised, particularly that smaller programs and nontraditional programs and providers might be eliminated from provider networks and no longer be available. Another serious concern is that families of children and adolescents will have less input in the decisions about services for their own children, and less input in the planning and operation of the systems. Further, it is feared that the needs of culturally diverse children and families will receive less attention under the new managed care systems, with fewer nontraditional providers, less outreach, and fewer services such as transportation and translation, which often enable individuals to use needed health care services.